In a release dated July 27^th McDonald’s Corporation, a bellwether for the QSR segment of the restaurant industry, reported results for the second quarter of FY 2023 ended June 30^th. For the period, the Company earned $2,301 million on total revenue of $6,497 million with a diluted EPS of $3.15.  Comparable figures for the second quarter of fiscal 2022 were net income of $1,188 million on total revenue of $5,718 million with a diluted EPS of $1.60. Revenue increased by 13.6 percent and operating margin advanced from 30.0 percent in the second quarter of 2022 to 47.7 percent for the most recent quarter. Gross margin for Company-operated stores rose from 16.2 percent in the second quarter of 2022 to 30.4 percent for the most recent quarter attributed to lower costs for food ingredients and packaging, rationalization of menus, the Accelerating the Arches efficiency initiative, increased traffic and promotions including the Grimace milkshake. The Company may be benefitting from trade-down from restaurant dining in the demographic with an annual income of $100,000.

In commenting on results, Chris Kempczinski, president and CEO stated, “Our second quarter results reflect consistently strong execution of our Accelerating the Arches strategy, with global comparable sales-growth of 11.7 percent and double-digit comparable sales growth across each of our segments,” He added “The McDonald’s brand has never been stronger and I remain inspired by the ability of the McDonald’s System to create cultural conversations and develop industry-leading innovations. While global macroeconomic challenges persist, we continue to invest in our growth drivers and our brand to meet the customer needs of tomorrow.”

For the second quarter of FY 2023, McDonald’s posted comparable sales growth in the U.S. of 10.3 percent compared to sales growth for the international operated markets segment of 11.9 percent and with global sales growth of 11.7 percent During the second quarter digital sales in the six top markets accounted for 40 percent of sales and attained $8 billion.

Projections for 2023 in the SEC 8-K report included net restaurant expansion contributing 1.5 percent to system wide sales with an operating margin of 45 percent. On June 30^th 2022 there were 40,801 McDonald’s locations with 2,127 Company-owned restaurants. During 2023 the Company will open 1,900 new restaurants globally. According to the investor call most will be traditional in design but the Company will test a small free-standing ‘CosMC’ format.

McDonald’s Corporation had a market capitalization of $213,000 million on July 27^th 2023.  Total assets on December 31^st 2022 amounted to $50,436 million of which 42.1 percent comprised lease right-of-use assets, goodwill and intangibles.  Long-term debt and lease obligation were $50,638 million. MCD has ranged over the past 52-weeks from $220.58 to $299.35 with a 50-day moving average of $299.35. MCD trades with a forward P/E ratio of 27.0.  The 12-month trailing operating margin was 45.4 percent and profit margin, 29.4 percent. Return on assets was 12.9 percent. Prior to release MCD closed on Wednesday July 26^th at $290.88 but opened higher post-release on Thursday 27^th at $295.85.